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Old 09-19-2005, 07:02   #1 (permalink)
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EU:Volvo says it will never build vehicles in U.S. despite currency, other concerns

Volvo says it will never build vehicles in U.S. despite currency, other concerns

MARK RECHTIN | Automotive News

FRANKFURT -- Volvo Car Corp. will not consider manufacturing vehicles in North America despite being exposed to currency-exchange losses in Europe, a senior executive said here last week.

Volvo's plants in Torslanda and Uddevalla, Sweden, and Gent, Belgium, are sufficient to reach its volume target of 600,000 annual units, said Magnus Hellsten, Volvo senior vice president in charge of manufacturing.

"There is tremendous capacity in the world, and we have capacity enough," Hellsten said in an interview.

The Swedish automaker also would not consider borrowing plant capacity from parent Ford Motor Co. to increase volume, he said.

At its sales target of 600,000 units a year, Volvo's three plants would be running full-out, with overtime. That possibility is not on the immediate horizon. Volvo's worldwide sales in 2004 rose 10 percent from the previous year to 456,224.

Despite the weakness of the dollar, Volvo also is not looking to increase its American supplier base. Volvo's biggest purchase from a U.S. supplier is floor mats, Hellsten said.

"We are sourcing from low-cost countries, and the U.S. is not low cost," he said.

"The U.S. currency advantage does not compare to the (wage) advantage of low-cost countries," Hellsten said. "And the transportation costs from America, as opposed to China, are a wash."
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